The Phoenix Suns: Constructing a Team as It Correlates to Team Salaries - Essay Example

?Running Head: THE PHOENIX SUNS: CONSTRUCTING A TEAM The Phoenix Suns: Constructing a Team as it Correlates to Team Salaries The Phoenix Suns: Constructing a Team as it Correlates to Team Salaries Introduction Sports teams spend a great deal of money on the players that they hire in order to get the best possible mix of good play from their hires. There is something to be said for the power of money in creating a team that is a winning team. The mix of financial incentive and quality from spending more is likely to provide for a higher level of team efficiency. However, when a team spends a modest amount on its players, how does that impact effectiveness? The Phoenix Suns is a team that has recently not been doing well. They have shown a turnaround this summer in the Summer League, but that is not a sure prediction of a turnaround during the regular season. With a new head coach and general manager both in their first year in those positions, the future of this year for the organization is predicted to be a team building year. The spending on salaries for team members is one of the ways in which a team can be predicted for success. The following analysis will look at the nature of team salaries and how they are predictive of success in relationship to the current position of the Phoenix Suns. Background: A New Head Coach and General Manager The Phoenix Suns have found a new coach in order to support their success, but they did not look too far from their own history. Jeff Hornacek was a second round draft pick for the Phoenix Suns in 1986, but now at the age of 50 has been hired as a first time head coach. The Suns are currently in trouble as they have not been showing much in the way of talent on the playing floor. The Suns have not been in this much trouble since well before most of the players were born, having really bad seasons in 1994 and even further back, making this during the time when Hornacek was playing. When Hornacek was in his third season as a combo guard, the team averaged about 36 wins in five seasons previous. However, Cotton Fitzsimmons, a veteran coach at the time, took over and flipped the franchise overnight so that he managed to gain 55 wins in his first season as coach. As a part of that history, Hornacek is one of the more popular players in the history of the organization. There is an expectation that Hornacek will pull a similar miracle to the one performed by Fitzsimmons in his freshman year as coach. Caplan (2013) writes that “The Suns haven't finished above .500 since 2010, when they went to the Western Conference finals. They bottomed out last season -- the first of the post-Steve Nash era -- at 25-57”. Ryan McDonough, age 33, is the first year general manager of the team. The team of Hornacek and McDonough form an unseasoned pair to lead the team towards better outcomes, but there have been some signs that there is already improvement. The Suns came close to winning the Summer League Championship. McDonough was instrumental in bringing in Eric Bledsoe and Carin Butler who both provide the potential for upping the quality of the play for the team. McDonough spoke out about how he views his position for this first year. He told Caplan (2013) that “"The expectations are, for me, just to establish a culture of work, to get better every day…I'm not going to measure our success this year in terms of wins and losses, just in terms of: Are we making progress? Are the guys buying in? Are they playing hard and playing the right way? That's what I'm looking for." In rebuilding this team the idea is to be steady and strong, building what they need and looking for the advantages and weaknesses so that they can work with them to build real teamwork. An example of an obstacle for Hornacek is Kendall Marshall who is described by Caplan (2013) as “the slow-footed point guard who was routinely outplayed in Vegas by the lanky and athletic Goodwin”. Wu (2013) writes that Marshall is consistently attached to any trades that the team considers as they want to move him in order to give Eric Bledsoe and Archie Goodwin more playing time. Caplan (2013) shows that another veteran player that is under scrutiny for poor performance is Michael Beasley. He was signed as a free agent acquisition in the summer of 2012 through what is a curious decision to offer him a three year contract with $18 million dollars. Determining Player Salaries Spending money on players is one of the ways that teams are built. According to Moskowitz and Wertheim (2012) “when the Yankees can spend north of $200 million on players as they did in 2009, and most other teams spend less than $100 million, they’re naturally going to have a heavy concentration of titles” (p. 61). This year the Phoenix Suns will spend $61,985,922 on player salaries (see Appendix 1) (Hoops Hype, 2013). Player salaries seem to be somewhat randomly determined, but Rosner and Shropshire (2011) have defined a rudimentary economic model for determining salaries base on the market for players. The correlations to the market are based upon a ‘best-fit’ determination in relationship to the organization and that other variables do not significantly impact the predictability of the salary. In other words, the model basically focuses on the idea that the salary of a player is not determined by variables that can predict the salary, but on what the player can demand in relationship to the value that he brings to the organization. The player gets what he can get. However, the model from which a salary is developed consists of details on scoring, rebounding, blocked shots, steals, and the amount of experience that the player has had in the past. The team player is also evaluated on the basis of their position in the draft as well as their marketability. The sad truth is that if a player is distinctive and better looking than other players, they will have a higher marketability (Rosner and Shropshire, 2011). The disparity in incomes for players is a problem that allows economists to use the sports labor model in order to do research in labor market discrimination. The unique problem of salary differences in sports is highlighted by a transparency in how a player is selected for employment which is something that is rarely available in other employment scenarios. Kahane and Shmanske (2012) write that “administration sources of data are likely to be more accurate than self reported earnings and have the advantage that they often contain the actual information used to make economic decisions” (p. 22). Racial disparity can also be studied in basketball labor economics. Basketball players are 80% African American. Rosner and Shropshir (2011) write that “the National Basketball Association (NBA) is seen by many as an oasis of economic opportunity for highly skilled African American Athletes” (p. 22). There were 42 players who signed contracts in the 2001-2002 season that equaled more than 10 million dollars and 37 of those players were African American. This type of success has extended into the coaching sector as of the 30 coaches in the league, eleven of them were African American (Rosner and Shropshir, 2011). However, with 80% of the league African American and only 33% of the coaches of the same, this might not look like the coaching side is reflecting the nature of the player side. One of the other ways that labor discrimination exists is through the system in which players are allowed to act as free agents. Players are under contract for at least three years after they are chosen in a draft. They cannot act as free agents in order to take advantage of competitive offers, thus they are subject to a monopsony on the part of the team. In addition, they are subject to the elasticity of their influence on the team. More popular team players, regardless of performance, may induce higher salary offers than other players of equal or even better performance. This relates to gender bias as well as female players are generally paid much less than their male counterparts (Rosner and Shropshire, 2011). The other problem that players face is that their contract can be sold to other teams. The Phoenix Suns The media focus is on whether or not Kendal Marshall will be able to remain on the team. The advantages for Marshall are that he has a very low contract with the Suns, being paid a little over $2 million per year, which is significantly less than Caron Butler who is being paid $8 million. Marshall is only 21 years old and has the capacity to mature as a player, finding strengths to compensate for some of his weaknesses. Marshall is quoted by King (2013) for saying that “"I wasn't as consistent as I wanted to be last year," Marshall said after his first practice with new coach Jeff Hornacek in preparation for the Summer League that begins on Saturday. "So if I can become more consistent on the defensive end and make my presence felt offensively getting guys in position to score as well as taking advantage of my own possessions, I think I can have a pretty good season." The intention of Marshall is to create himself as a facilitator for other star performers, but Hornacek has shown that this is not the player he wants. He needs Marshall to shoot higher and to run faster. This is not the game that Marshall plays, according to King (2013). There is some hope for Marshall. King (2013) quotes Hornacek for saying “"He's not the type of guy that is gonna fly down the court and penetrate and put pressure on a defense…But he's a great passer when it gets into drag action, pick and rolls. He can hit those rollers and make the extra passes and those guys can put the pressure on the defense." Hornacek goes on to say that if he can get his shooting under control, something that Hornacek had to do himself when he first began in the NBA, then Marshall has a chance of having the value that they need (King, 2013). In comparison to other players in the organization, his salary shows that the expectations on him can be adjusted if he can add value without necessarily having to be a star performer. In terms of investment, the Phoenix Sun has invested less in its highest paid performer than one of the top organizations in the league, the Orlando Magic. The Magic are paying Gilbert Arenas $22,346,536 for the 2013-2014 season, in comparison to the $8 million they are paying Butler. They Magic are spending $18 million more for their players’ salaries than are the Suns. The logical conclusion to resource allocation is that the more success is created, the more resources there are to allocate (Smith, 2010). However, on the opposite end of the discussion, it is clear that the more success is desired, the more investment is required to fulfill that goal. Moskowitz and Wertheim (2012) discuss the need of good defense in basketball in order to be a winning team. They write that while offense is a sexier part of the game, defense is equally as necessary to win. In the economics of basketball, having the resources to obtain better players is a defense against competing teams who want the same players. Without this type of defense from a business standpoint, the team is not going to compete at the same level as other top teams. However, the difference between the top paid team member on the Magic in comparison to number to is more than $10 million dollars, which shows that the distribution of income for the team members has a steep disparity. Moskowitz and Wertheim (2012) write that “teams with more variable talent across their players are more likely to make the finals and more likely to win a championship than teams with more uniformly distributed talent” (p. 171). If salaries are an indication of talent, the wide diversity of salaries in the Magic shows that this theory is true as they have been more active as champion level players than have the Suns. Where the salaries on the Magic show a disparity between the more than $ 22 million dollar salary to the more common $7 million dollar average, and then down to a more common $2 million dollar range, the Suns have their highest paid member at that $8 million, dropping into a range of $6 million, but with more of the players being paid in the $2 million dollar range (see Appendix 1). Moskowitz and Wertheim (2012) further write that a superstar on the team with a supporting cast of lesser players is going to provide the team with a better showing than an evenly distributed group of talent. The goals that Hornecek has discussed are in conflict with this theory as Caplan (2013) has written that he intends to work on creating a team that is developed on the basis of distribution of talent. The reason this may be, however, is that there is no high paid star on the Phoenix Suns with the highest paid member of the team in the median salary range of those on the Orlando Magic, a much higher ranking team. What an organization is willing to pay its team members will reflect on the talent that they can afford and attract, thus providing the coach with resources that are specified according to that value. Where Hornacek has not received a star player, at least not according to what is currently being paid, he must rely on what he can do with the resources that he has been given. Conclusion Team success can be attributed to the way in which resources are allocated to developing a team in relationship to player salaries. When team members consist of a star or two with the rest of the players being backups to those stars, the team is more likely to see success. A team like the Phoenix Suns who is spending less per team member with no clear star is likely to not perform as well, as has been shown by their performances of the last few years. A team like the Magic which invests in a star player will have a higher ranking. The new coach for the Phoenix Suns, Jeff Hornacek intends to develop his team and repeat the success of Cotton Fitzgerald, which will likely mean developing one of the players into a star. The example of Marshall, however, shows that paying for a cheaper salary can be a drag on the team and it is likely that it will mean trading him to another organization. Player salaries are an indication of how a team is distributed in relationship to talent. Investing in player salaries meaning cultivating a more diverse talent pool which has been shown to leading to greater success. Player salary is based on a number of different variables that all boil down to providing a competitive edge in the market. Players that cannot act as free agents, however, are unable to act on those competitive forces and will be stuck with organizational decisions about their contract. Kendall Marshall is currently under contract and will go where ever the Suns choose, whether that is to remain on their team or to be traded to another organization. The lack of power that some players have in comparison to the power of others shows that there is a labor market discrimination bias in effect. However, where talent is concerned players are subject to the various forces that give them leverage which is in tension with the leverage that the organizations have which defines how they find positions on a team. References Caplan, J. (30 June 2013). Hornacek returns to Phoenix to lead Suns out of darkness. NBA. Retrieved from http://www.nba.com/2013/news/features/jeff_caplan/07/30/new-coach- series-2013-jeff-hornacek/index.html?ls=iref:nbahpt3a Hoops Hype. (2013) Phoenix Suns salaries. Retrieved from http://hoopshype.com /salaries/phoenix.htm Kahane, L. H., & Shmanske, S. (2012). The Oxford handbook of sports economics. Oxford: Oxford University Press. King, D. (9 July 2013). Kendall Marshall in a fight for a spot on the Phoenix Suns. SB Nation. Retrieved from http://www.brightsideofthesun.com/2013/7/9/4509562/kendall-marshall- in-a-fight-for-spot-with-phoenix-suns Moskowitz, T. J., & Wertheim, L. J. (2012). Scorecasting: The hidden influences behind how sports are played and games are won. New York: Three Rivers Press. Rosner, S., & Shropshire, K. L. (2011). The business of sports. Sudbury, MA: Jones & Bartlett Learning. Smith, E. (2010). Sociology of sport and social theory. Champaign, IL: Human Kinetics. Wu, Mathew. (19 July 2013). Could Marshall rumors be hoax? Sun n Gun. Retrieved from http://sunngun.com/2013/07/19/could-marshall-rumors-be-a-hoax/ Appendix 1 Salaries Phoenix Suns Player 2013/14 2014/15 2015/16 2016/17 2017/18 Caron Butler $8,000,000 $0 $0 $0 $0 Marcin Gortat $7,727,280 $0 $0 $0 $0 Goran Dragic $7,500,000 $7,500,000 $7,500,000 $0 $0 Josh Childress $7,182,500 $7,317,500 $0 $0 $0 Channing Frye $6,400,000 $6,800,000 $0 $0 $0 Michael Beasley $6,000,000 $6,250,000 $0 $0 $0 Shannon Brown $3,500,000 $0 $0 $0 $0 Gerald Green $3,500,000 $3,500,000 $0 $0 $0 Eric Bledsoe $2,626,473 $3,726,965 $0 $0 $0 Markieff Morris $2,207,040 $3,153,860 $4,361,788 $0 $0 Marcus Morris $2,096,760 $3,105,301 $4,319,473 $0 $0 Kendall Marshall $2,005,560 $2,091,840 $2,989,239 $4,134,117 $0 Miles Plumlee $1,121,520 $1,169,880 $2,109,293 $3,113,316 $0 Archie Goodwin $1,064,400 $1,112,280 $1,160,160 $2,094,089 $3,141,133 PJ Tucker $884,293 $0 $0 $0 $0 Malcolm Lee $854,389 $0 $0 $0 $0 Hamed Haddadi $200,000 $0 $0 $0 $0 Alex Len           TOTALS: $61,985,922 $32,479,780 $7,500,000 $0 $ Orlando Magic Player 2013/14 2014/15 2015/16 2016/17 2017/18 Gilbert Arenas $22,346,536 $0 $0 $0 $0 Hidayet Turkoglu $12,000,000 $0 $0 $0 $0 Jameer Nelson $8,600,000 $8,000,000 $0 $0 $0 Arron Afflalo $7,562,500 $7,562,500 $7,750,000 $0 $0 Al Harrington $7,148,600 $7,609,800 $0 $0 $0 Glen Davis $6,400,000 $6,600,000 $0 $0 $0 Victor Oladipo $4,763,760 $4,978,200 $5,192,520 $6,552,960 $8,551,612 Quentin Richardson $2,808,600 $0 $0 $0 $0 Nikola Vucevic $1,892,280 $2,902,757 $4,078,373 $0 $0 Moe Harkless $1,809,840 $1,887,840 $2,894,058 $4,045,893 $0 Tobias Harris $1,630,800 $2,511,432 $3,581,302 $0 $0 Andrew Nicholson $1,482,000 $1,545,840 $2,380,593 $3,394,725 $0 E'Twaun Moore $884,293 $0 $0 $0 $0 Doron Lamb $788,872 $915,243 $0 $0 $0 Kyle O'Quinn $788,872 $915,243 $1,181,348 $0 $0 Jason Maxiell           Ronnie Price           TOTALS: $80,906,953 $26,750,500 $7,750,000 $0 $0 (Hoops Hype, 2013) Read More